The board of state-run telecom operator Bharat Sanchar Nigam (BSNL) Limited has reportedly approved the proposal to lay off over 54,000 employees. The final call on the matter is expected to be taken after the 2019 Lok Sabha elections are over.
The BSNL board has approved three of ten suggestions put forth by a government expert panel, the Deccan Herald reported. The approved suggestions include reduction in retirement age from the existing 60 years to 58 years, Voluntary Retirement Scheme, and fast-tracking allocation of 4G spectrums to BSNL, the daily reported.
The expert panel, which recommended the steps approved by the BSNL board, was formed in the face of mounting losses at the telecom company. The three-member panel consists of professors Rekha Jain, Vishal Gupta and Ajay Pandey from Indian Institute of Ahmedabad (IIM-A).
The decision to cut down the retirement age and announce VRS package will see around 54,451 BSNL employees exiting the government-owned telco, the report said. This constitutes around 31 per cent of the 1.74 lakh-strong workforce of BSNL.
The move is expected to help the state-run telecom firm save Rs 13,895 crore on the wage bill over the next six years, whereas the VRS might help it save Rs 1,671 crore to Rs 1,921.24 crore every year, the report said. The decision to announce a VRS package could help the embattled telecom operator save up to Rs 1,921 crore annually, the report said, but at a cost of 13,000 crore
On the other hand, the Department of Telecommunications (DoT) is likely to wait for the 2019 Lok Sabha elections to be over before going ahead with the proposals regarding retirement age and VRS. The DoT has decided to wait as announcing VRS packages or layoffs and shutting down businesses of the telecom firm now could have a significant bearing on the employees and the elections, the report said.
Moreover, reports suggest that the DoT will approach the Election Commission of India seeking approval for its Cabinet proposal to offer VRS to BSNL and MTNL employees. The telecom ministry has to seek ECI's approval before going to the Cabinet as the Model Code of Conduct is in place in view of 2019 Lok Sabha elections. The DoT is reportedly preparing a Cabinet note for its VRS package.
BSNL has been posting losses since the entry of Reliance Jio in the Indian telecom market and the tariff war that followed. Last month, the company failed to pay its employees for the first time since it started operations. The full salaries were later disbursed after government released pending dues.
Meanwhile, reports suggested that the DoT may implement the recommendations under the 7th Pay Commission for BSNL sometime in April 2019. The department has already forwarded the demands of salary and pension hike raised by BSNL employee union AUAB to the Ministry of Finance.